Russian economy to recover in one or two years despite oil prices

21.01.2016

The Russian economy may recover in the next two years regardless of what will be happening to oil prices, former Finance Minister Alexei Kudrin said.

Kudrin, who chairs the Committee of Civil Initiatives, earlier expressed pessimistic forecasts about the Russian ruble and the crisis in Russia. Surprisingly, at the World Economic Forum in Davos, Kudrin shared his ideas about the imminent recovery of the Russian economy.

"The Russian economy will reach positive indicators in a year or two," RIA Novosti quoted him as saying.

Alexei Kudrin said that the creation of federal reserves, the reduction of the Russian public debt and the free floating of the national currency may resume the growth of the Russian economy.

In addition, the former finance minister said that "the sharp devaluation of the Russian ruble is a temporary phenomenon." According to him, the Russian currency will regain at least some of its positions as it was in December 2014.

Earlier, UN experts have a positive forecast for the Russian economy. The report said that the inflation rate in Russia in 2016 will amount to 10.5% before it will slide to 7.1% in 2017. Russia's GDP growth is expected to rise from zero to 1.2 percent during the upcoming couple of years, the report also said.

The Central Bank of the Russian Federation is able to quickly stabilize the ruble, adviser to the Russian president Sergei Glazyev said Tuesday at "Small Business - National Idea" forum.

According to Glazyev, fluctuations of the ruble exchange rates serve as a tool for speculators to fill their pockets. Last year, they earned nearly $20 billion on such operations.

"We can easily stabilize the exchange rate of the Russian ruble. Firstly, this is because the ruble is a highly secured currency. The volume of gold and currency reserves that we have is twice the amount of money in the Russian economy. Secondly, the ruble is the most undervalued currency. The nominal rate is 2.5 times lower than the purchasing parity. Therefore, the monetary authorities can easily stabilize the exchange rate and stop the speculative mayhem," the officials said.

On January 21, 2016, the exchange rate of the Russian ruble reached an all-time low. The ruble was traded at 83 rubles per one dollar and 90 rubles per one euro.